Oil Prices Remain Rangebound As Volatility Fades

Image Credit: wset.com

February 23, 2024/Oilprice.com

Tom Kool
Editor, Oilprice.com

Oil prices have remained rangebound in recent weeks, with macro concerns driving the direction of both Brent and WTI.

Friday, February 23rd, 2024

Oil trading in the past weeks has seen remarkably little volatility, with Brent futures moving within a narrow bandwidth between $81 and $84 per barrel lately. Macro factors seem to be dominating the minor day-on-day moves in crude, with two Federal Reserve governors warning against interest rate cuts in the next two months. Consequently, oil prices are set to end the week at a slight decline, with Brent closing the week around $82 per barrel.

Oxy Eyes Gas Asset Sale to Ease Debt Burden. US oil producer Occidental Petroleum (NYSE:OXY) is exploring a sale of Western Midstream Partners, a gas pipeline operator valued at close to $20 billion in which it has a 49% stake, seeking to deduce debt after the CrownRock acquisition.

Guyana Has Oil But Its Gas Dreams Get Delayed. Guyana has delayed until 2025 its plans to build a $1.9 billion gas-to-power plant with a 300 MW capacity even though ExxonMobil (NYSE:XOM) will be ready with a pipeline connecting offshore fields to the coast by year-end.

Alberta Wildfires Start Soon This Year. Amidst counter-seasonally dry and mild weather, wildfires in the western Canadian province of Alberta started much earlier than usually and apart from the 52 wildfires still burning from last year there are 17 new reported blazes in 2024.

Zinc Becomes Metal Bears’ Favourite Pick. Hedge funds have been increasing bets that zinc, already this year’s weakest base metal performer that’s currently trading at $2,400 per tonne, will see further downside as LME stocks soared to 228,500 tons recently on the back of oversupply.

Chesapeake Gas Production Cuts Lift Prices. Henry Hub futures rebounded by 13% this Wednesday to $1.65 per mmBtu after US gas producer Chesapeake Energy (NASDAQ:CHK) announced it would cut production by 30% this year due to a clearly oversupplied market.

Bakken Consolidation Underway with Chord-Enerplus Deal. Bakken-focused US producer Chord Energy (NASDAQ:CHRD) agreed to buy industry peer Enerplus for $3.7 billion in a stock and cash deal, boosting its production portfolio by 287,000 boe per day, mostly in the Williston basin.

Iraq Restarts Refinery Destroyed by ISIS. Iraq restarted the 310,000 b/d Baiji refinery in the north of the country, shut back in 2014 when the Islamic State took over the adjacent territory and damaged the plant, with Baghdad expecting the plant to be running at 150,000 b/d, half of its previous capacity.

Mexico’s Pemex Focuses on Paying Big Service Firms. Mexico’s national oil company Pemex partially resumed paying down its debt vis-à-vis its suppliers, prioritizing oilfield service majors such as SLB (NYSE:SLB) or Halliburton (NYSE:HAL), seeking to avoid any disruption in its own upstream operations.

Shell’s Green Credentials Suffer Another Blow. UK-based global energy major Shell (LON:SHEL) agreed to sell its 80% stake in the 1.25 GW MunmuBaram floating offshore wind project in South Korea to its joint venture partner Hexicon for a mere $5 million, marking yet another wind project exit from oil firms.

Venezuela Starts Buying Russian Oil. Marking the first-ever Venezuelan purchase of Russian crude oil, the Ligera VLCC is set to unload its 1.8 million-barrel cargo of Urals at the Amuay refinery operated by PDVSA, in a sign of Caracas preparing for a potential snapback of US sanctions in April.

ADNOC’s Giant Merger Plans Hit Roadblocks. Negotiations over the anticipated merger between the chemicals arms of ADNOC and Austria’s OMV have slowed down in recent weeks as the two sides have failed to resolve several disagreements, including the name of the new company and its headquarters.

Qatar Pays Homage to Rex Tillerson. QatarEnergy has named its first LNG carrier to be delivered amidst a vast fleet expansion program after Rex Tillerson, the former Secretary of State who is believed to have prevented a Saudi attack on Qatar, with the ship expected to be put in service in September 2024. 

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